Wednesday, March 20, 2019

The first time I stood in a long line at the Motor Vehicle Administration (MVA) in suburban Baltimore was 1979. Since then, much has happened in my life: I taught thousands of students, got married, raised a family, and moved away from Baltimore. Recently, my son, living in the Baltimore area, needed help with the subtleties of car buying, and I went to assist.

In a free market, consumers shape their experience by selecting products that serve them well, not offering or accepting bribes.

Compared to today, cars manufactured in 1979 were unsafe and unreliable. My ‘79 Volkswagen Rabbit developed a head gasket problem in the first 15,000 miles, but warranties in 1979 covered only one year or 12,000 miles. There were no airbags. Today, car manufacturers compete on safety; collision avoidance features, unimagined in 1979, shaped my son’s car choice.

The car-buying experience has completely changed, too. In 1979, buyers had limited information and often endured unpleasant negotiations with salesmen. Increased competition due to the ascendance of Japanese automobiles and a dramatic increase in information available to car buyers have made it simpler to get a great deal on a car without even setting foot in a showroom.

MVA Déjà Vu

After completing the new car purchase, we drove to the MVA to turn in my son's old plates. The address had changed, but the bleak Soviet-style interior remained intact. Just as in 1979, one line almost out the door snaked toward a check-in counter. When you made it to the counter, you then sat in one of the long rows of chairs until it was your turn.

Like Soviet-era bread lines, you got in line, waited, and hoped for a favorable outcome.

There were few signs. No attendants were there to answer questions. Like Soviet-era bread lines, you got in line, waited, and hoped for a favorable outcome.

My son was anxious to return to his job and insisted we leave. His plan was to return the next day to get in line an hour before the MVA opened at 8:30 a.m. Well before 8:30, many supermarkets and home improvement stores are open to accommodate early shoppers, but MVA managers set hours without having to meet the demands of customers.

As my son stood in the early morning cold, he chatted with others. Some shared stories of previous attempts to obtain MVA services, having abandoned their positions in line after waiting for hours. One told of a three-hour wait. They are lucky; in California, all-day waits are not uncommon.

Government Inefficiency

Support for socialism among millennials and Generation Z is on the rise. When millennials stand in MVA lines, do they wonder what their experience will be when the government takes a more significant role in their lives?

Dreaming of a revolutionary republic, do the millennials who support democratic socialists imagine they will be proclaimed heroes of the republic and ushered to the head of the breadline? Or, like their hero Bernie Sanders, do they believe that breadlines are a “good thing”? Will they feel true equality when, along with their neighbors, they share the heartache of not getting enough food to feed their starving children?

If the democratic socialists are successful, long lines, shortages, and bribes will become the new norm in America.

In short, why are some craving the MVA experience in more areas of their lives? Why do they not heed historical evidence of failed socialists’ regimes? Do they believe the next time it will be different? Do they believe the lines will disappear when the right people, with pure hearts like they imagine themselves to have, are in charge?

It’s fine to imagine the right people working at the MVA, but even the right people cannot create an efficient MVA.

Without the Profit Motive, Good Decisions Are Impossible

Democratic socialists such as Alexandria Ocasio-Cortez imagine a better world where decision-makers are not constrained by having to earn a profit. In his book Bureaucracy, Ludwig von Mises explains why decision makers can never make good decisions when they operate without the market signals of profit and loss:

It is true that under socialism there would be neither discernible profits nor discernible losses. Where there is no calculation, there is no means of getting an answer to the question whether the projects planned or carried out were those best fitted to satisfy the most urgent needs; success and failure remain unrecognized in the dark. The advocates of socialism are badly mistaken in considering the absence of discernible profit and loss an excellent point. It is, on the contrary, the essential vice of any socialist management. It is not an advantage to be ignorant of whether or not what one is doing is a suitable means of attaining the ends sought. A socialist management would be like a man forced to spend his life blindfolded.

The personnel at the Maryland MVA seemed indifferent; moving the line along did not seem to be part of their decision-making calculus. If supervisory personnel were on duty, they didn’t pitch in; they remained hidden in their back offices. In each of us is the capacity for empathy, as well as indifference and even cruelty. What makes one individual access the best qualities that humanity can offer while those qualities lay dormant in another individual?

At your local supermarket, if lines get too long, it is not uncommon to hear the “all personnel to the front” announcement. There is a palpable sense of urgency to serve customers. Mises explains that in successful organizations, managers understand consumer sovereignty:

[The manager] is not simply a hired clerk whose only duty is the conscientious accomplishment of an assigned, definite task. He is a businessman himself, a junior partner as it were of the entrepreneur, no matter what the contractual and financial terms of his employment are. He must to the best of his abilities contribute to the success of the firm with which he is connected.

Consider a buyer for the supermarket who often listens to the pitches of potential suppliers. Suppliers don’t offer her bribes; they know to offer her features valued by her customers. Does she set standards for customer experience and accept poor performance from her assistants? Again, Mises explains why the buyer’s decisions must respond to the needs of customers:

He will not waste money in the purchase of products and services. He will not hire incompetent assistants and workers; he will not discharge able collaborators in order to replace them by incompetent personal friends or relatives. His conduct is subject to the incorruptible judgment of an unbribable tribunal: the account of profit and loss. In business there is only one thing that matters: success. The unsuccessful department manager is doomed no matter whether the failure was caused by him or not, or whether it would have been possible for him to attain a more satisfactory result. An unprofitable branch of business-sooner or later-must be discontinued, and its manager loses his job.

The MVA manager is under no such constraints. Why try to fire an incompetent civil service employee when you’d be subjecting yourself to endless hearings? Why argue to open earlier and close later to accommodate customers when you’d be told: “That’s not the way it’s done here”?

“Consumers are merciless” when they are not well served, but only “in an unhampered market society,” writes Mises. At the MVA, those who wait suffer silently and follow the directives of those who care little about their welfare.

Bureaucracy Deadens the Soul

During my teaching career, I taught MBA classes on-site at a government agency. Many of those career employees were impressive. They held high-level positions; they were brilliant thinkers and dedicated learners. Yet, among these relatively young individuals was a running joke; they could recite exactly how many years and months they had until retirement. And to a person, they did retire at the earliest possible date. These individuals had far more autonomy than the government workers Mises wrote about in 1944. Nonetheless, core truths apparently remain:

Government jobs offer no opportunity for the display of personal talents and gifts. Regimentation spells the doom of initiative. The young man has no illusions about his future. He knows what is in store for him. He will get a job with one of the innumerable bureaus, he will be but a cog in a huge machine the working of which is more or less mechanical. The routine of a bureaucratic technique will cripple his mind and tie his hands. He will enjoy security. But this security will be rather of the kind that the convict enjoys within the prison walls. He will never be free to make decisions and to shape his own fate. He will forever be a man taken care of by other people. He will never be a real man relying on his own strength. He shudders at the sight of the huge office buildings in which he will bury himself.

How you do anything is how you do everything. In never learning to care for customers at the MVA, employees never learn to rely on their own best qualities. Because their own abilities and sensibilities lie dormant, they don’t know they are suffering along with those they “serve.”

Next time it won’t be different. If the democratic socialists are successful in shifting more of the economy into government provision of services, long lines, shortages, and bribes will become the new norm in America.